Big Data: Understanding How Data Powers Big Business

Chapter 1

The Big Data Business Opportunity

Every now and then, new sources of data emerge that hold the potential to transform how organizations drive, or derive, business value. In the 1980s, we saw point-of-sale (POS) scanner data change the balance of power between consumer package goods (CPG) manufacturers like Procter & Gamble, Unilever, Frito Lay, and Kraft—and retailers like Walmart, Tesco, and Vons. The advent of detailed sources of data about product sales, soon coupled with customer loyalty data, provided retailers with unique insights about product sales, customer buying patterns, and overall market trends that previously were not available to any player in the CPG-to-retail value chain. The new data sources literally changed the business models of many companies.

Then in the late 1990s, web clicks became the new knowledge currency, enabling online merchants to gain significant competitive advantage over their brick-and-mortar counterparts. The detailed insights buried in the web logs gave online merchants new insights into product sales and customer purchase behaviors, and gave online retailers the ability to manipulate the user experience to influence (through capabilities like recommendation engines) customers' purchase choices and the contents of their electronic shopping carts. Again, companies had to change their business models to survive.

Today, we are in the midst of yet another data-driven business revolution. New sources of social media, mobile, and sensor ...